Q & A

I am 63 and am eligible for Social Security Disability Insurance (SSDI). My wife is 64 and needs to work four more quarters. I may receive $1,000 per month from a State Retirement Plan. Should I hold off on taking SSDI?

Answer: You can’t lose from taking your SSDI. At full retirement age (66 in your case), it will convert to your Social Security unreduced retirement benefit. But at 66, you can withdraw your retirement benefit and wait until 70 to collect it, at which point it will be 32 percent larger.

And, if your wife gets those four extra months of coverage and, thereby, ends up with at least 40 quarters of coverage, she’ll be eligible for her own retirement benefit. In this case, you can also have your wife file for her retirement benefit when you reach 66 and then have her suspend its collection. This will let you take your full spousal benefit, which will equal half of her full retirement benefit. But given that your wife won’t have contributed to the system for that many years, her retirement benefit will likely be very small.

If you worked for a state in a job that wasn’t covered by Social Security, you’ll have your spousal benefit reduced and possibly eliminated by the Government Pension Offset provision (GPO), and your retirement benefit will be reduced by the Windfall Elimination Provision (WEP). But neither the GPO nor the WEP will kick in until you start taking your state pension.

As for your wife, when she is 66, she can apply just for a full spousal benefit based on your earnings history and delay her own retirement benefit until 70, when it will start at its largest level. But if you do this, she can’t get you a full spousal benefit when you are 66 because she won’t have filed for her retirement benefit, regardless of whether she suspends its collection. You cannot both receive full spousal benefits unless you divorce.

Source: Ask Larry Kotlikoff, PBS.

Notice: The information and opinions expressed in these postings are the viewpoints of the original source and are not explicitly endorsed by AMAC, Inc. or socialsecurityreport.org.

Social Security Prototype Bill

AMAC’s founder, Dan Weber, has been in the forefront of the fight to address the problems facing America’s Social Security program. Put simply, the program is paying out more than it’s taking in, causing a gradual depletion of the Social Security Trust Fund. If left unchecked, projections are that this depletion will cause the Trust Fund balance to be exhausted by 2033, with the result being a scale-down of payments—as much as 25%—to Social Security recipients.

As an action-oriented association, AMAC is resolved to do its part to call for action on this very serious problem.

AMAC has developed a simple, actuarially sound solution that has been advanced to Capitol Hill. AMAC representatives have been resolute in their mission to get the attention of lawmakers in Washington, meeting with many, many congressional offices and their legislative staffs over the past several years. The Association is gaining ground every day, and you can help--support AMAC in this fight by joining the "AMAC Army" and contacting your congressional representative to add your voice!

Visit the Association’s website at www.AMAC.us to learn more about AMAC’s proposed solution and to obtain a copy of a free booklet outlining the steps that need to be taken to resolve this very serious problem.